Good article that details exactly why the bitcoin is a pyramid scheme

[Faust]

I'm kind of leaning toward the pro-bitcoin camp, just a teeny bit, on account of - no matter how much of a scam it might be, it's nowhere even close to capitalism which I've been saying for years has to go. Sooner rather than later.

Bitcoin is not perfect but it's a tiny step in the right direction, toward decentralising control. This is one small area which needs to be addressed before we can tackle this utter clusterfuck we currently have going on.

Whilst there is merit in recognising ways in which new tech can be abused, this rarely turns out to be a valid argument against the tech itself. However, it does seem to generate quite a bit of angsty condemnation regardless. PD is no exception to this rule.

When human beings recognise a threat and take steps to avoid it, their brain gives them a cookie

I'm going to disagree, not coming from a vested interest in bitcoin, or bitcoin bashing (though that IS fun). In that I believe that because of the missteps of the bitcoin, the fact that it entered common usage primarily because of it's role in drug purchasing has tarnished the idea of decentralised currencies by making them seem farcical, volatile, insecure, and in this specific incarnation a pyramid scheme.

In doing so they have made it that much harder for a legitimate decentralised currency to be established. One step forward, two steps back and all that.

[The Good Reverend Roger]

I don't see that a decentralized currency is the answer.  I see hanging a bunch of bankers from lamp posts to be the answer, for the encouragement of the others.

[Faust]

I don't see why you cant have both.

[The Good Reverend Roger]

I don't see why you cant have both.

To my mind, a new currency just means that people who are paid to find the loopholes will see them before the rest of us do.  Instead, keep the known system, and ruthlessly prosecute the people who are caught with their hand in the till.

Not gonna happen?  Maybe.  But no alternative currency is going to make the nut, either.  And judging from early American history (articles of confederation), it SHOULDN'T.  Between the end of the revolution and the ratification of the current constitution, our country was a mess.  Money didn't spend right, because there were dozens of different forms of it.

[Cain]

P3nt, you say bitcoin is nowhere near as big a scam as capitalism.

Yet, some of the biggest proponents of unfettered capitalism are also proponents of deregulated and private currency markets ie; bitcoin.  In fact, many of the most vocal bitcoin supporters are exactly the kind of crude American lolbertarians that make everyone around them cringe with their full-throttled support of unfettered capitalism - including other libertarians.

[Faust]

I don't see why you cant have both.

To my mind, a new currency just means that people who are paid to find the loopholes will see them before the rest of us do.  Instead, keep the known system, and ruthlessly prosecute the people who are caught with their hand in the till.

Not gonna happen?  Maybe.  But no alternative currency is going to make the nut, either.  And judging from early American history (articles of confederation), it SHOULDN'T.  Between the end of the revolution and the ratification of the current constitution, our country was a mess.  Money didn't spend right, because there were dozens of different forms of it.

I imagine it would almost certainly be a disaster and that the first thing that would happen would be a derailment by banking institutions, property developers and the like. Not that they would to dismantle or weaken it, but to exploit it for their own gains, I can imagine a bank would be the FIRST to jump on an opportunity to circumvent regulation.

[Cain]

Rumour has it some banks may have quietly encouraged bitcoin as a test run for their own digital currencies.

[Faust]

That wouldn't surprise me in the least. The banking crash led to a few paltry regulations on banks but the only one that really spit in their eye was capping bonus's. If a fast method existed of transferring assets into bitcoin and back would act as the perfect loophole to circumvent both the bonus rule and a million and one other things that they can't get away with at the moment.

[P3nT4gR4m]

I get what everyone's saying about this having been attempted before but two things were very different now.

The first thing - Quality of Life. The industrial revolution that sorta morphed into the technological revolution has made us much more comfortable, in a relativistic sense, when taken as a global average. Basic needs are increasingly taken care of. It's no longer a subsistence planet.

The other thing is a product of that same revolution - we can come up with a fully autonomous distributed system to administer this. That system might not be bitcoin but whatever it is, it's on it's way. Wouldn't it be funny if it was already here? One of the more obscure crypto currency formats? Couple of Geeks, sitting in their uni dorm room, like how modern revolutions increasingly seem to happen?

[Junkenstein]

I'd say part of the fundamental problem with cryptocurrencies is that they're trying to solve too many problems at the same time resulting in being able to solve none.

Look at even the most basic aspect which would tempt most - The Anon currency to buy bags of drugs. Most, if not all, can't even make that claim with a straight face. When you factor in the other possible problems with scams and exploitation it just becomes untenable.

[P3nT4gR4m]

The key seems to be something that inspires trust in the system itself. Couple this with a growing lack of trust in the existing setup and/or potential collapse of said system and it might be just about time for the right format to enter the picture.

What I like about bitcoin is not bitcoin, it's the fact that it hints at a viable alternative even though it doesn't exactly demonstrate it.

[trix]

Can't speak for Scotland, but we tried decentralized currency here in the USA, for a few years.  It was so bad, we scrapped our first constitution and started over.

Looking that up was a very interesting history lesson.
Thank you.

--

I'd say part of the fundamental problem with cryptocurrencies is that they're trying to solve too many problems at the same time resulting in being able to solve none.

Look at even the most basic aspect which would tempt most - The Anon currency to buy bags of drugs. Most, if not all, can't even make that claim with a straight face. When you factor in the other possible problems with scams and exploitation it just becomes untenable.

But one problem it does appear to solve is the print-money-at-will governmental power, especially when fiat is created as a loan with interest owed... that whole "not enough USD exists in the world to pay all the debt in the world" problem.  Worth the other issues?  Who knows.  Bitcoin definitely ain't perfect, but neither is what we have now.  The question is which is better.

The biggest problem I see with bitcoin, leading to all the scams and most of the bullshit, is the current state of computer security.  If technology can catch up to the ability of hackers to break into systems, and protect stupid people from themselves better, bitcoin could mitigate much of its problems.  Currently however, exploits and software vulnerabilities account for a huge portion of the problem, and people falling for social engineering are the other.  Those problems aren't solvable, but they are reducible.  So how much does this situation have to improve before bitcoin is considered an improvement upon the status quo?

I think that answer is different for different folks.

[Junkenstein]

But one problem it does appear to solve is the print-money-at-will governmental power, especially when fiat is created as a loan with interest owed

Why exactly is this a problem and specifically a problem for you?

The question is which is better.

Not really, I'd say it's more important to recognize a bad option when it's being presented as a good one. Look at the financial backers of these assorted currencies. Consider who currently owns the largest share of bit coins.

If technology can catch up to the ability of hackers to break into systems, and protect stupid people from themselves better, bitcoin could mitigate much of its problems.

Good luck with that. I'm sure the trend will change any second now.

[trix]

But one problem it does appear to solve is the print-money-at-will governmental power, especially when fiat is created as a loan with interest owed

Why exactly is this a problem and specifically a problem for you?

Inflation is a problem for everyone that uses the money being endlessly inflated...

The question is which is better.

Not really, I'd say it's more important to recognize a bad option when it's being presented as a good one. Look at the financial backers of these assorted currencies. Consider who currently owns the largest share of bit coins.

If technology can catch up to the ability of hackers to break into systems, and protect stupid people from themselves better, bitcoin could mitigate much of its problems.

Good luck with that. I'm sure the trend will change any second now.

Point and Point, though the people who own the largest share of USD aren't any better than those who own the most bitcoins, and with bitcoins, it's far less of a landslide.

"good option" or "bad option" isn't what I think the comparison should be.  "Better" or "Worse" than current, is more useful I think.  I still think Bitcoin can be better than what we are using now.

[Cain]

Funny, the US had a higher rate of inflation before it adopted the current financial model it operates under.  Centralised banks, while terrible in many respects, are actually, compared to other historical methods, much better at controlling inflation.

And let's not pretend bitcoin's own deflation is any less economically troubling.  In fact it is much more so, and there is compelling evidence for deflationary debt theory.  In fact, a deflationary spiral perfectly describes the state of the economy post-2008, when deflationary debt is considered as a key cause.

But, you know, Hong Kong prospered after the Asian Financial Crisis, so obviously deflation's not an issue.